Economic Viability Report Greenwich Peninsula SE10...

Economic Viability Report

Greenwich Peninsula SE10 – Memorandum of Understanding plots

FOI Exemption Section 41 & 43 (2) Private and Confidential

Prepared for

Quintain Estates and Development plc

January 2013

FOI Exemption Section 41 & 43 (2) Private and Confi dential

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Contents 1 Introduction 3 2 Development description 5 3 Methodology 6 4 Assumptions 7 5 Assessment of the outputs of the appraisal 12 6 Conclusion 13

Appendices Appendix 1 - Development appraisal 14


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1 Introduction BNP Paribas Real Estate has been commissioned by Quintain Estates and Development plc (‘QED’) to provide an assessment of the economic viability of the proposed development of ten plots at Greenwich Peninsula, SE10 (“the Development”). Our terms of reference are summarised as follows:

■ Assess the Residual Land Value (“RLV”) of the Proposed Scheme by way of a development appraisal; and

■ Using the outputs of the appraisal, consider an appropriate and economically viable affordable housing package.

1.1 BNP Paribas Real Estate

BNP Paribas Real Estate is a leading firm of chartered surveyors, town planning and international property consultants. The practice offers an integrated service from fourteen offices within the United Kingdom and over sixty offices in key commercial centres in Europe, the United States of America and the Asian and Pacific regions.

BNP Paribas Real Estate has a wide ranging client base, acting for international companies and individuals, banks and financial institutions, private companies, public sector corporations, government departments, local authorities and registered social landlords.

The full range of property services includes:

■ Planning and development consultancy; ■ Affordable housing consultancy; ■ Valuation and real estate appraisal; ■ Property investment; ■ Agency and Brokerage; ■ Property management; ■ Building and project consultancy; and ■ Corporate real estate consultancy.

This report has been prepared by Nicholas Pell MSc under the supervision of Anthony Lee MRTPI MRICS, RICS Registered Valuer.

The Affordable Housing Consultancy team of BNP Paribas Real Estate advises landowners, developers, local authorities and registered social landlords (“RSLs”) on the provision of affordable housing.

In 2007, we were appointed by the GLA to review its Development Control Toolkit Model (commonly referred to as the “Three Dragons” model). This review included testing the validity of the Three Dragons’ approach to appraising the value of residential and mixed use developments; reviewing the variables used in the model; and advising on areas that required amendment in the re-worked toolkit. We were recently appointed by the GLA to undertake a further review of the toolkit and other available appraisal models and submitted out report in February 2012.

Anthony Lee is a member of the RICS ‘Experts in Planning Service’ panel, which was established in March 2009 to support the Planning Inspectorate on major casework and local development plan work submitted for independent examination. He has assisted the inspectors examining the economic viability of housing policies within the Core Strategies of Stockton Borough Council; Hinckley and Bosworth Council; and East Northants District Council.


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In addition, we were recently retained by the Homes and Communities Agency (“HCA”) to advise on better management of procurement of affordable housing through planning obligations.

The firm therefore has extensive experience of advising landowners, developers, local authorities and RSLs on the value of affordable housing and economically and socially sustainable residential developments.

1.2 Report structure

This report is structured as follows:

Section 3 provides a description of the proposed Development;

Section 4 describes our methodology and approach to determining the RLV generated by the proposed Development;

Section 5 sets out our assumptions and variables used to complete the appraisal;

Section 6 assesses the outputs of the appraisal and makes recommendations on an economically viable level of affordable housing provision; and

Section 7 sets out our conclusions.

1.3 Disclaimer The contents of this report do not constitute a valuation, in accordance with Valuation standards 1.1 of the RICS Valuation Standards – Global and UK (May 2011), and should not be relied upon as such. This report is addressed to QED only and its contents should not be reproduced in part or in full without our prior consent.

1.4 Confidentiality

This report is provided to the Royal Borough of Greenwich (“the Council”) on a confidential basis. We request that the report not be disclosed to any third parties under the Freedom of Information Act (Sections 41 and 43 (2)).


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2 Development description 2.1 Site Description

The Site is located adjacent to the O2 Centre within close proximity to Canary Wharf, the West End and London’s City Airport and forms part of a 190 acre masterplan for the Greenwich Peninsula. North Greenwich Underground Station provides access to Central London via the Jubilee Line within 10 minutes.

2.2 Proposed development

The proposed Development will create a new district for London including homes, offices, schools, shops and community facilities.

This report assesses the viability of ten plots within the masterplan, as follows:

■ MO103 ■ MO104 ■ MO114 ■ MO115 ■ MO116 ■ MO117 ■ NO601 ■ NO602 ■ NO607 ■ NO608

Quintain and the GLA have agreed that the ten plots will provide 25% of habitable rooms as affordable, all of which shall be provided in seven plots in the south of the Peninsula (MO101, MO103, MO104, MO114, MO115, MO116 and MO117). No plot is to contain more than 50% social rented housing or more than 60% affordable housing (i.e. the total of social rent and intermediate tenures). Plots NO601, NO602, NO607 and NO608 are to be provided as 100% private housing. Plot MO101 is excluded from this assessment as the site has been transferred to Bellway.


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3 Methodology We have used Argus Developer (‘Argus’) to appraise development proposals. Argus is a commercially available development appraisal package in widespread use throughout the industry. It has been accepted by a number of local planning authorities for the purpose of viability assessments and has also been accepted at planning appeals. Banks also consider Argus to be a reliable tool for secured lending valuations. Further details can be accessed at www.argussoftware.com.

Argus is essentially a cash-flow model. Such models all work on a similar basis:

■ Firstly, the value of the completed development is assessed. ■ Secondly, the development costs are calculated, including either the profit

margin required or land costs. In our appraisals we include profit as a development cost.

The difference between the total development value and total costs equates to the residual land value (“RLV”). The model is normally set up to run over a development period from the date of the commencement of the project until the project completion, when the development has been constructed and is occupied.

The cash-flow approach allows the finance charges to be accurately calculated over the development period. This approach can accommodate more complex arrangements where a number of different uses are provided or development is phased.

In order to assess whether a development scheme can be regarded as being economically viable it is necessary to compare the RLV that is produced with a benchmark land value. If the Development generates a RLV that is higher than the benchmark it can be regarded as being economically viable and therefore capable of providing additional affordable housing. However, if the Development generates a RLV that is lower than the benchmark it should be deemed economically unviable and the quantum of affordable housing should be reduced until viability is achieved.


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4 Assumptions This section of the report sets out the general principles and assumptions which have been used to undertake a development appraisal of the Development.

4.1 Housing Market Commentary

4.1.1 National Housing Market

The historic highs achieved in the UK housing market by mid 2007 followed a prolonged period of real house price growth. However, a period of ‘readjustment’ began in the second half of 2007, triggered initially by rising interest rates and the emergence of the UK sub prime lending problems in the last quarter of 2007. The subsequent reduction in inter-bank lending led to a general “credit crunch” including a tightening of mortgage availability. The real crisis of confidence, however, followed the collapse of Lehman Brothers in September 2008, which forced the government and the Bank of England to intervene in the market to relieve a liquidity crisis.

The combination of successive shocks to consumer confidence and the difficulties in obtaining finance led to a sharp reduction in transactions and significant correction in house prices in the UK, which fell to a level some 21% lower than at their peak in August 2007, according to the Halifax House Price Index. Consequently, residential land values fell by some 50% from peak levels. One element of government intervention involved successive interest rate cuts and as the cost of servicing many people’s mortgages is linked to the base rate, this financial burden has progressively eased for those still in employment. This, together with a return to economic growth early 2010 (see November 2012 Bank of England GDP fan chart below) meant that consumer confidence started to improve to some extent.

Source: Bank of England


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4.1.2 Local Housing Market

According to Land Registry data, residential sale prices in the London Borough of Greenwich recovered well in mid 2010. However, this has not continued through into 2013. There is little indication that 2013 will see any significant further growth in prices, as sales volumes remain at historically low levels.

Source: Land Registry

4.2 Gross Development Value (“GDV”)

4.2.1 Residential Sales Values

QED has provided us with anticipated residential sales values ranging from £521 per square foot to £671 per square foot dependent on the location of the unit.

We have researched the local housing market through discussion with active local agents and through review of online internet resources. Through examining the comparable evidence collected we consider the assumption provided to us by QED as reasonable.

4.2.2 Affordable Housing Revenue

The GLA has committed to providing grant funding to support the provision of affordable housing at the scheme. An allocation to London and Quadrant amounts to £90,000 per unit for one and two bed units for rent; £130,000 per unit for three and four bed units for rent; and £30,000 per shared ownership unit. A pre-condition of this funding is that the affordable units are to be transferred to the RSL before 31 March 2013 and that construction has commenced by this date (or another date agreed between the parties).

We have assumed the capital values for the affordable residential units as provided by QED. The adopted values are found in the following table (shown inclusive of grant):

Tenure Value (£ psf) inclusive of grant

Intermediate Units £335

Social Rented Units £193


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4.2.3 Ground Rents

We have assumed ground rents at a rental value of £0.47 per square foot capitalised at a yield of 5%.

4.3 Development Costs

4.3.1 Construction Costs

QED has provided us with a total development cost in addition to a breakdown of the construction cost per square foot for the different elements of the proposed Development. It should be noted that the costs shown in the following table are based on a gross external area with a gross to net ratio of 75% and are inclusive of professional fees at 13.4% and a contingency of 3%. We have summarised these costs in the following table:

Plot Total B uild Cost (£) Blended average build cost (£ per square foot) inclusive of professional fees and contingency

N0601 £61,072,560 £320

N0608 £122,249,307 £306

N0602 £139,702,572 £310

N0607 £164,384,115 £299

M0115 £25,535,094 £230

M0117 £36,230,546 £227

M0114 £47,516,333 £234

M0103 £42,344,224 £229

M0116 £25,924,458 £224

M0104 £56,059,793 £227

The proposed development incorporates a range of building heights, including towers of 33 storeys and the costs above are commensurate with this type of building.

Taking into account the nature and constraints of the proposed Development and the provision of car parking facilities we have adopted the construction costs proposed by QED within our appraisal.

4.3.2 Professional Fees

QED has included 13.4% for professional fees within the cost plan. This fee allowance is reflective of the complexities associated with a scheme of this scale.

4.3.3 Contingency

QED has included a 3% contingency within their gross development cost. It should be noted that this is below what we would consider to be a reasonable assumption (5% is the standard assumption).


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4.3.4 Interest

Where development finance is available (which is only in a select number of situations) lenders are currently charging up to 5% above LIBOR with minimum rates of at least 7%. High arrangement (1-3%), monitoring (2-5%) and exit fees (1%) are also charged. These onerous lending terms have emerged due to the perceived risk of residential development in the current market.

We have adopted an interest rate of 7%, with no additional allowance for fees, which we consider to be an optimistic assumption for a development of this nature in the current market. It should be noted that although a bank would not provide 100% of the funding required for the proposed Development is conventional to assume finance on all costs in order to reflect the opportunity cost (or in some cases the actual cost) of committing equity to the project.

4.3.5 Developer’s Profit

When considering the changing economic climate, financial institutions are tightening their requirement for profit returns on schemes. Banks have raised their expectations in terms of risk and required returns that new developments offer. Consequently developers are currently targeting profits of 20% of GDV for typical development schemes. We have adopted this profit allowance in relation to the private residential accommodation.

Where applicable, we have also adopted a profit rate of 6% on cost for the affordable housing residential units. This is in line with the benchmark value of the GLA Development Control Toolkit model and the HCA’s Economic Appraisal tool.

4.3.6 Common costs and planning Obligations

The plots are required to make contributions towards infrastructure serving the entire peninsula, in addition to Section 106 contributions. These costs are allocated on the basis of a rate per square foot, subject to finance costs and indexation. Plots that are brought forward for development later in the programme will clearly bear a higher cost than those brought forward earlier, due to the impact of financing costs and indexation. The common costs for the ten plots amount to £91,380,118 and this allowance has been included in our appraisal.

4.3.7 Mayoral CIL

Developments in the London Borough of Greenwich are required to pay £35 per square metre for Mayoral CIL. We have included the following payments within our appraisal:


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Plot CIL Payment (£)

N0601 £619,779

N0608 £1,298,945

N0602 £1,463,245

N0607 £1,787,309

M0115 £150,366

M0117 £215,784

M0114 £275,285

M0103 £250,184

M0116 £156,727

M0104 £333,646

Total CIL Payment £6,551,271

4.3.8 Marketing and disposal costs

We have adopted the following cost of sales, which are in line with market assumptions:

■ Marketing fees at 3% of market GDV; and ■ Purchasers’ costs at 5.8%.

4.4 Project timetable

The agreement with the GLA requires that construction of the affordable housing units on plots MO1011, MO114, MO115 and MO117 is commenced no later than 31 March 2013. The target date for commencing construction on the remaining plots which include affordable housing (MO116, MO103 and MO104) is 31 March 2014. 266 of the 646 affordable housing units are to be completed by 31 March 2015, while the remaining 380 affordable housing units are to be completed by 31 March 2017.

The private housing in the southern plots (MO101, MO103, MO104, MO114, MO115, MO116 and MO117) is to be constructed at the same time as the affordable housing in these plots.

Construction of the private housing only plots is to be completed by 31 December 2019. Our appraisal reflects these requirements.

Plots Commencement of construction

Completion of construction

MO101, MO114, MO115 MO117 (affordable)

31 March 2013 31 March 2015

MO116, MO103, MO104 (affordable)

31 March 2014 31 March 2017

MO101, MO114, MO115, MO117, MO116, MO103, MO104 (private)

31 January 2014 31 March 2017

NO601, NO602, NO607 and NO608 (private)

No specific date in agreement

31 December 2019

1 Bellway site – excluded from this assessment.


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5 Assessment of the outputs of the appraisal In this section, we consider the outputs of the appraisals and the implications for the provision of affordable housing at the proposed Development.

5.1 Viability Benchmark

QED has entered into an agreement with the Homes and Communities Agency to develop the plots listed in Section 2. The benefit of this agreement has now passed to the GLA. The agreement sets out a requirement for a minimum land value (‘MLV’) of £50,131,133. In addition to this land payment, the GLA is entitled to a further land payment if the scheme achieves a minimum of 22% profit on cost. For the purposes of our assessment, we have utilised a viability benchmark of £50 million that disregards the potential further land payment.

5.2 Appraisal Results

We have undertaken an appraisal of the scheme with 25% affordable housing by habitable rooms. Our appraisal (attached as Appendix 1) demonstrates that the proposed Development generates a RLV of minus £23,384,9682. When compared with our Viability Benchmark figure of £50,131,133 the proposed Development generates a deficit of £73,516,101.

Residual land value Benchmark land value Residual land value less benchmark

-£23,384,968 £50,131,133 £73,516,101

Clearly, therefore, the proposed Development cannot viably provide any additional affordable housing in the current market, nor can it viably make any financial contribution to offsite affordable housing. The scheme relies upon a degree of sales value inflation to become viable against the benchmark land value.

2 This incorporates a 20% developer’s profit as a cost in line with standard convention. In practice, the developer would need to offset the profit against the shortfall.

FOI Exemption Section 41 & 43 (2) Private and Conf idential

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6 Conclusion Our appraisal results demonstrate that the viability of the proposed Development is likely to present challenges for delivery in the short term. The viability of the proposed Development is compromised by the introduction of affordable housing units. Although this suggests that the delivery of the proposed Development will be challenging, QED has committed to delivering the scheme in the anticipation of improving sales values, thus allowing them to achieve a normal level of profit. If values increase to a level that profit increases beyond this normal level, the public sector interest is protected through the overage mechanism. This would require an additional land payment to be made to the GLA, which could be included in future grant funding programmes to deliver affordable housing.

FOI Exemption Section 41 & 43 (2) Private and Conf idential

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Appendix 1 - Development appraisal

BNP Paribas Real Estate

Development Appraisal

Greenwich Peninsula

Quintain

Report Date: 22 January 2013

Prepared by BNPPRE

TIMESCALE & ASSUMPTIONS BNP PARIBAS REAL ESTATE

Greenwich Peninsula

Quintain

Timescale (Duration in months)

Project commences Jan 2013

Phase 1: N0601

Stage Name Duration Start Date End Date Anchored To Aligned Offset

Phase Start Jan 2013

Pre-Construction 6 Jan 2013 Jun 2013 Purchase End 0

Construction 16 Jul 2013 Oct 2014 Pre-Construction End 0

Sale 16 Mar 2014 Jun 2015 Income Flow End -8

Phase End Jun 2015

Phase Length 30

Phase 2: N0608




Construction 24 Jul 2014 Jun 2016 Pre-Construction End 0

Sale 40 Nov 2014 Feb 2018 Income Flow End -20

Phase End Feb 2018

Phase Length 62

Phase 3: N0602






Phase End Feb 2017

Phase Length 50

Phase 4: N0607




Construction 30 Jul 2014 Dec 2016 Pre-Construction End 0


Phase End Feb 2019

Phase Length 74

Phase 5: M0115



Pre-Construction 12 Jan 2013 Dec 2013 Purchase End 0

Construction 18 Jan 2014 Jun 2015 Pre-Construction End 0

Sale 6 Apr 2015 Sep 2015 Income Flow End -3

Phase End Sep 2015

Phase Length 33

Phase 6: M0117





Sale 7 Mar 2015 Sep 2015 Income Flow End -4

Phase End Sep 2015

Phase Length 33

File: G:\Development & Residential Consulting\Jobs\Affordable Housing\122257 - Quintain - Greenwich Peninsula\Greenwich Peninsula.wcf

ARGUS Developer Version: 4.05.001 Date: 22/01/2013


Greenwich Peninsula

Quintain

Timescale (Duration in months)

Phase 7: M0114





Sale 9 Feb 2016 Oct 2016 Income Flow End -5

Phase End Oct 2016

Phase Length 46

Phase 8: M0103




Construction 24 Jan 2015 Dec 2016 Pre-Construction End 0

Sale 9 Aug 2016 Apr 2017 Income Flow End -5

Phase End Apr 2017

Phase Length 52

Phase 9: M0116





Sale 6 Apr 2016 Sep 2016 Income Flow End -3

Phase End Sep 2016

Phase Length 45

Phase 10: M0104




Construction 24 Jan 2015 Dec 2016 Pre-Construction End 0

Sale 11 Jul 2016 May 2017 Income Flow End -6

Phase End May 2017

Phase Length 53

Phase 11: M0120



Pre-Construction 3 Jan 2013 Mar 2013 Purchase End 0

Construction 12 Apr 2013 Mar 2014 Pre-Construction End 0

Sale 6 Apr 2014 Sep 2014 Income Flow End 0

Phase End Sep 2014

Phase Length 21

Phase 12: M0101



Pre-Construction 3 Jan 2013 Mar 2013 Purchase End 0

Construction 12 Apr 2013 Mar 2014 Pre-Construction End 0

Sale 6 Apr 2014 Sep 2014 Income Flow End 0

Phase End Sep 2014

Phase Length 21

Project Length 74 (Merged Phases - Includes Exit Period)

Assumptions

Expenditure




Greenwich Peninsula

Quintain

Assumptions

Professional Fees are based on Construction

(Manual relations applied to some Professional Fees)

Purchaser's Costs are based on Net Capitalisation

Purchaser's Costs Deducted from Sale (Not added to Cost)

Sales Fees are based on Net Capitalisation

Sales Fees Added to Cost (Not deducted from Sale)

Receipts

Show tenant's true income stream On

Offset income against development costs Off

Rent payment cycle Quarterly (Adv)

Apply rent payment cycle to all tenants On

Renewal Void and Rent Free apply to first renewal only Off

Initial Yield Valuation Method Off

Default Capitalisation Yield 0.0000%

Apply Default Capitalisation to All Tenants Off

Default stage for Sale Date Off

Align end of income stream to Sale Date Off

Apply align end of income stream to all tenants On

When the Capital Value is modified in the cash flow Recalculate the Yield

Valuation Tables are Annually in Arrears

Rent Free method Defer start of Tenant's Rent

Finance

Financing Method Basic (Interest Sets)

Interest Compounding Period Quarterly

Interest Charging Period Monthly

Nominal rates of interest used

Calculate interest on Payments/Receipts in final period Off

Include interest and Finance Fees in IRR Calculations Off

Automatic Inter-account transfers Off

Manual Finance Rate for Profit Erosion Off

Calculation

Site Payments In Arrears

Other Payments In Arrears

Negative Land In Advance

Receipts In Advance

Initial IRR Guess Rate 8.00%

Minimum IRR -100%

Maximum IRR 99999%

Manual Discount Rate Off

IRR Tolerance 0.001000

Letting and Rent Review Fees are calculated on Net of Deductions

Development Yield and Rent Cover are calculated on Rent at Sale Date(s)

Include Tenants with no Capital Value On

Include Turnover Rent Off

Net of Non-Recoverable costs On

Net of Ground Rent deductions Off

Net of Rent Additions/Costs Off




Greenwich Peninsula

Quintain

Assumptions

Value Added Tax

Global VAT Rate 0.00%

Global Recovery Rate 0.00%

Recovery Cycle every 2 months

1st Recovery Month 2 (Feb 2013)

VAT Calculations in Cash Flow On

Residual

Land Cost Mode Residualised Land Value

Multi-Phasing Separate Land Residual for each phase

Target Type Profit on Cost

Phase Number Target Value Locked Treat Neg Land

Value as Revenue

1. N0601 0.00% No No

2. N0608 0.00% No No

3. N0602 0.00% No No

4. N0607 0.00% No No

5. M0115 0.00% No No

6. M0117 0.00% No No

7. M0114 0.00% No No

8. M0103 0.00% No No

9. M0116 0.00% No No

10. M0104 0.00% No No

11. M0120 0.00% No No

12. M0101 0.00% No No

Distribution

Construction Payments are paid on S-Curve

Sales Receipts are paid on Single curve

Sales Deposits are paid on Monthly curve

Interest Sets

Interest Set 1

Debit Rate Credit Rate Months Start Date

7.00% 0.00% Perpetuity Jan 2013

Inflation and Growth

Growth Sets

Growth Set 1

Inflation/Growth for this set is calculated in advance

This set is not stepped

Rate Months Start Date

0.00% Perpetuity Jan 2013

Inflation Sets

Inflation Set 1

Inflation/Growth for this set is calculated in advance

This set is not stepped

Rate Months Start Date

0.00% Perpetuity Jan 2013



APPRAISAL SUMMARY BNP PARIBAS REAL ESTATE

Greenwich Peninsula

Quintain

Summary Appraisal for Merged Phases 1 2 3 4 5 6 7 8 9 10 11 12

REVENUE

Sales Valuation Units Unit Amount Gross Sales

Car Parking 40 units at £18,000 720,000

Car Parking 100 units at £18,000 1,800,000









Totals 9,306,000

ft² Rate ft² Gross Sales

Private Residential Units 142,956 £671.00 95,923,476





Affordable - Intermediate 14,592 £335.00 4,888,320

Affordable - SFR 34,048 £193.00 6,571,264



Affordable - SFR 48,861 £193.00 9,430,173



Affordable - SFR 62,335 £193.00 12,030,655



Affordable - SFR 56,651 £193.00 10,933,643



Affordable - SFR 35,489 £193.00 6,849,377



Affordable - SFR 75,550 £193.00 14,581,150

Totals 1,958,096 1,046,378,019 1,055,684,019

Rental Area Summary Units Unit Amount Gross MRV

ft² Rate ft² Gross MRV

Ground Rents 142,956 £0.47 67,189

Ground Rents 299,611 £0.47 140,817

Ground Rents 337,508 £0.47 158,629

Ground Rents 412,256 £0.47 193,760

Ground Rents 34,683 £0.47 16,301

Ground Rents 49,722 £0.47 23,369

Ground Rents 63,497 £0.47 29,844

Ground Rents 57,707 £0.47 27,122

Ground Rents 36,150 £0.47 16,991

Ground Rents 76,958 £0.47 36,170

Totals 1,511,048 710,193

Investment Valuation

Ground Rents

Current Rent 67,189 YP @ 5.0000% 20.0000 1,343,786

Ground Rents

Current Rent 140,817 YP @ 5.0000% 20.0000 2,816,343

Ground Rents




Greenwich Peninsula

Quintain

Current Rent 158,629 YP @ 5.0000% 20.0000 3,172,575

Ground Rents

Current Rent 193,760 YP @ 5.0000% 20.0000 3,875,206

Ground Rents

Current Rent 16,301 YP @ 5.0000% 20.0000 326,020

Ground Rents

Current Rent 23,369 YP @ 5.0000% 20.0000 467,387

Ground Rents

Current Rent 29,844 YP @ 5.0000% 20.0000 596,872

Ground Rents

Current Rent 27,122 YP @ 5.0000% 20.0000 542,446

Ground Rents

Current Rent 16,991 YP @ 5.0000% 20.0000 339,810

Ground Rents

Current Rent 36,170 YP @ 5.0000% 20.0000 723,405

14,203,851

GROSS DEVELOPMENT VALUE 1,069,887,870

Purchaser's Costs 5.80% (73,667)

NET DEVELOPMENT VALUE 1,069,814,203

Income from Tenants

Ground Rents 72,788

Ground Rents 222,961



Ground Rents 2,717

Ground Rents 3,895

Ground Rents 7,461

Ground Rents 6,781

Ground Rents 2,832

Ground Rents 12,057

986,320

NET REALISATION 1,070,800,523

OUTLAY

ACQUISITION COSTS

Residualised Price (23,384,968)

Stamp Duty 4.80% 1,010,151

Agent Fee 1.00% 210,448

Legal Fee 0.50% 105,224

(22,059,145)

CONSTRUCTION COSTS

CIL Payments 6,551,270

Common Costs 91,380,120

97,931,390

Other Construction

Development Costs 61,072,560










721,019,002

MARKETING & LETTING

Marketing 3.00% 28,231,607

28,231,607




Greenwich Peninsula

Quintain

Additional Costs

Profit on Affordable 6.00% 687,575


Profit on Affordable 6.00% 1,258,811




Profit on Private 20.00% 19,597,452










198,597,636

FINANCE

Debit Rate 7.00% Credit Rate 0.00% (Nominal)

Total Finance Cost 39,767,165

TOTAL COSTS 1,063,487,655

PROFIT

7,312,868

Performance Measures

Profit on Cost% 0.69%

Profit on GDV% 0.68%

Profit on NDV% 0.68%

Development Yield% (on Rent) 0.07%

Equivalent Yield% (Nominal) 5.00%

Equivalent Yield% (True) 5.16%

Gross Initial Yield% 5.00%

Net Initial Yield% 5.00%

7.30%

Rent Cover 10 yrs 4 mths

Profit Erosion (finance rate 7.000%) 0 yrs 1 mths



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